AWS (Amazon Web Services) Certification Practice Exam

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Dive into the AWS Certification Exam with our comprehensive quiz. Challenge yourself with multiple-choice questions designed to mimic the exam format. Each question includes detailed explanations to boost your understanding and help you ace your AWS Certification!

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What causes Spot Instance pricing to fluctuate?

Fixed pricing model
Underutilization of instances
Supply and demand conditions
Predefined company pricing

The correct answer is: Supply and demand conditions

Spot Instance pricing in AWS is determined by the dynamics of supply and demand in the cloud computing marketplace. Spot Instances allow users to bid on unused EC2 capacity at potentially lower prices compared to On-Demand Instances. The prices are set based on the availability of EC2 capacity and the number of users willing to purchase that capacity. When there is a high demand for EC2 instances and limited availability, the prices for Spot Instances increase. Conversely, when there is a surplus of available capacity and fewer users are bidding for it, the prices tend to decrease. This model creates a fluctuating price mechanism, whereby the cost can change frequently based on market conditions, leading to potential cost savings for users who are flexible with their instance usage. The other options do not accurately capture the pricing strategy for Spot Instances. A fixed pricing model would imply constant prices, which contradicts the nature of Spot pricing volatility. Underutilization of instances does not inherently affect pricing, and predefined company pricing does not apply to Spot Instances, as they operate under a bidding model driven by market conditions.